The trend toward online retailing has once again been strongly fueled by the Corona pandemic, with lockdowns and temporary closures of brick-and-mortar retail outlets. Poland in particular has benefited significantly from this development, as the country offers all the prerequisites for e-commerce retailers to quickly supply the national, Western and Eastern European markets from there, with a large supply of warehouse space, sufficient staff availability and a good transport infrastructure. "Numerous fashion companies use Poland for their online business. Western Poland in particular offers short delivery times to Germany and neighboring countries." says Lidia Ratajczak-Kluck, Managing Director of Arvato Supply Chain Solutions in Poland. No wonder, that especially in poland the growth of arvato supply chain solutions is remarkable and that we were able to implement a large number of new customers in the last two years.
With the surge in e-commerce business, the logistics and fulfillment required for this has also been increasingly transferred to specialized service providers such as Arvato Supply Chain Solutions. We have been active in Poland since 1994, with focus on handling online business for well-known large manufacturers and retailers in the fashion, beauty and cosmetics sectors since 2014. To this end, we now operate a total of sixteen logistics centers in the regions of Poznań, Warsaw and Łódź, where more than 2,200 employees work on more than 400,000 square meters of warehouse space. The trend towards online shopping is not expected to decline in the future. On the contrary, because online sales have not decreased and have even continued to grow after the end of the last lockdown and the reopening of the shopping malls.
Different approaches in e-commerce
When it comes to supply chains for online business, fashion companies take different approaches. While some use their traditional suppliers, others rely on specialized e-commerce service providers - especially when new structures need to be set up quickly. For example, Arvato is able to set up e-commerce supply chains in just three months if the customer is willing to use standard solutions. For more customized solutions, an implementation period of six to twelve months usually has to be calculated. In addition, there are currently supply bottlenecks and waiting lists for the installation of the required technical equipment, be it conveyor technology or automation technology.
Although automation technology reduces the need for labor, there is still a need to flexibly adjust the workforce in order to be able to handle high volumes during peak times such as Black Friday, for example. In this respect, Poland, with its large supply of labor, offers advantages. Local recruitment agencies are well organized, and there are no problems obtaining work permits. "In e-commerce logistics, you have to be able to increase the number of employees quickly." underlines Ratajczak-Kluck.
In addition to the clear trend toward online commerce, another development is emerging: for example, Corona has caused delivery delays in the fashion industry - and not only there - from production facilities in Asia to Europe. This has prompted many of Arvato's customers to use production and delivery sites closer to home in order to make their global supply chains more resilient in the future. The focus is currently on production sites in Poland, Turkey and North Africa, for example. Some production has even returned to Italy and Spain. However, analysts believe that the process of rebuilding European production will continue until at least 2025.
Advantages of de-centralization
Moreover, companies have recognized the advantages of having some of their production nearby to respond to rapid market changes. They are unlikely to move production entirely back to Asia anytime soon, especially now that sustainability is becoming more of a focus. Consumers in particular appreciate it when production is local and the CO2 emissions of long-distance transport are avoided. Nearby production locations are also ideal for today's "fast fashion" model of the fashion industry, with ultra-short lead times between design and production. If, as in the past, there is a six-month wait for a collection, the design is already out of date before it hits the stores. Not least through social media, an expectation has arisen that new collections can be bought in stores immediately after they are presented.